Forging America: The History of Bethlehem Steel - Chapter 3

Bethlehem Steel Graphic Banner: Chapter 3

While Schwab was building up Bethlehem Steel, he was also engaging his workers' talents outside the plant. He gave the employees $25,000 to develop athletics among themselves, and the result was a championship soccer team. Between 1913 and 1930, the Bethlehem Steel Soccer Club won 11 national trophies.

Spalding's Soccer Guide saluted Schwab in 1916, saying he ''realizes the vast importance of a spirit of amity between the head of a great corporation and the army of men it employs.''

Bethlehem Steel also had a baseball league, but more than anything, it was a shelter for big-league players trying to stay out of the First World War. Schwab formed the league in 1917 with instructions that he wanted ''some good wholesome games that will furnish amusement and entertainment for the Bethlehem Steel Co.'s employees, and don't bother me about details of expense.''

At first, plant workers did get to play ball. But in 1918, pros covered the diamonds. The War Department had issued a work-or-fight order, saying men had to have essential jobs or else don a uniform. Pros looking for ways to avoid military service flocked to Bethlehem Steel and other companies, which were happy to have them. These companies promised the players undemanding jobs and better pay than many of them made at their ballclubs.

Among players who joined the Bethlehem Steel league were two of the game's all-time greats  Shoeless Joe Jackson, who left the Chicago White Sox to work at Steel's Harlan Shipyard in Wilmington, and Babe Ruth, a Boston Red Sox pitcher whose name was added to the payroll at the company's Lebanon mill in mid-September. He apparently left town about eight weeks later, right after the Armistice.

Beyond encouraging sports, Schwab used his money and influence to help mold Bethlehem and its culture, mainly after the 1910 strike had stunned the community and left residents believing he was harsh and uncaring. He couldn't help but do something. After all, it was his company's explosive growth that quadrupled Bethlehem's population in one decade, from 12,800 in 1910 to 50,300 in 1920.

Schwab endeared himself to the upper class by enticing the Bach Choir's founder back to Bethlehem in 1911. J. Fred Wolle had started the choir in Bethlehem in 1900 to publicly perform the works of Johann Sebastian Bach. But five years later, he left the Valley for a job in California, and the popular choir disintegrated. Now Schwab was not only its savior, but its biggest financial supporter.

He also gave money to the Lehigh Valley Symphony Orchestra, and in 1910 started the Bethlehem Steel Co. Band, which gave free public concerts.

His company provided money to St. Luke's Hospital and to create a baby health center, after the daughter of Lehigh University's president was shocked to learn that the infant mortality rate in South Bethlehem was the highest in the state. The center opened in 1915 and had three branches by 1920.

Schwab provided a building for a free public library and promoted construction of the city's only public high school, Liberty High, in 1922 and the landmark Hill-to-Hill Bridge over the Lehigh River in 1924. He encouraged others to build the grand Hotel Bethlehem, completed in 1921, so he wouldn't have to send clients to the dowdy Sun Inn. He gave money to Lehigh University and served on its board of trustees.

He was the catalyst in getting the boroughs of Bethlehem and South Bethlehem to merge into a city in 1917. (Bethlehem had absorbed the borough of West Bethlehem in 1904.) The first mayor of the united Bethlehem was Steel executive Archibald Johnston. In 1920, the city annexed Northampton Heights, east of south Bethlehem. Northampton Heights was one of the richest boroughs in the state, because it contained valuable steel company and railroad properties.

In 1919, Schwab celebrated the completion of his estate in his boyhood home of Loretto  Immergrun, German for ''Evergreen,'' a 44-room mansion on a thousand elaborately maintained acres that included a private golf course.

He also mourned the passing of his mentor, Andrew Carnegie, at age 84 in his mansion in Lenox, Mass. On Aug. 11, 1919, Carnegie asked his secretary to hand him a picture of Schwab. When he gazed at it, his lips curled into a smile, and he died. His affection for Schwab had run deep till the end, despite his fury over the Monte Carlo gambling trek.

Years earlier, he had given Schwab a painting that he said held a lesson for life. It showed an old monk happily rubbing his belly after a meal of nothing but an apple and a glass of wine.

''Any time that you feel blue or inclined to be despondent,'' Carnegie told Schwab, ''just look at this old monk's happy countenance and your depression will disappear. Always remember that good business is never done except in a happy and contented frame of mind.''

Schwab hung the painting in his company's boardroom and embraced its message. Not even the stock market crash of 1929 deflated him.

''Be not afraid,'' he told the press. ''The stock market cannot stop or stem the prosperity that extends throughout this great country of ours.''

He was wrong about that, but years later, he was still holding on to his sunny disposition and explained why.

''I am glad I have been optimistic,'' he said at a meeting of the American Iron and Steel Institute, a trade group with headquarters in New York, ''because it has resulted in so much pleasure in business, and because it has been true, and because it is the frame of mind that will make us all advance in our business progress, our human relations and our happiness in life.''

By the early 1920s, Schwab no longer had his hands on the daily management of Bethlehem Steel. He was in the catbird seat, getting $150,000 a year as chairman, holding many millions of dollars in stock and happy to have his ''boy'' Grace in charge.